Environment

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Our commitment to safeguarding the environment is a key aspect of the Hess Value of Social Responsibility and underpins the way we work every day. We strive for continuous improvement in our environmental impacts, which include water and energy use, air emissions, waste and spills. Across our company, we deploy dedicated staff and significant resources to help ensure compliance with environmental laws and regulations, international standards and voluntary commitments. We have developed a range of key performance metrics to track our environmental performance and drive improvement over time at both the asset and enterprise levels. Certain of these metrics are also factored into our annual incentive plan, to further advance our culture of environmental stewardship.

Water Management

The communities and ecosystems in which we operate depend on water to thrive. Water is also important for our onshore operations, where we primarily use it for drilling and completions in our upstream operations and cooling in our midstream gas processing operations.

Water management has been identified as a material issue for Hess and is a key element of our environment, health, safety and social responsibility (EHS & SR) strategy. In 2019, we continued to develop our risk-based, lifecycle approach to managing water, completing a stressed water resource analysis in the Bakken region and sponsoring two pilot studies focused on tracking and treating produced water.

See the Shale Energy section of our website for more detail on our approach to water management in our shale operations

Leak Detection and Repair

We employ a leak detection and repair (LDAR) program at our production facilities in North Dakota. The LDAR program covers each fugitive emissions component at these facilities. The U.S. Environmental Protection Agency (EPA) defines a “production facility” as “all structures, piping, or equipment used in the production, extraction, recovery, lifting, stabilization, separation or treating of oil, or associated storage or measurement, and located in an oil or gas field.” The agency defines “fugitive emissions component” as “any component that has the potential to emit fugitive emissions of methane or volatile organic compounds at a well site, production facility or compressor station, including but not limited to valves, connectors, pressure relief devices, open-ended lines, flanges, covers and closed vent systems, thief hatches or other openings on a storage vessel, compressors, instruments and meters.”

In 2019 we continued to enhance our LDAR field assurance team. This team conducts audible, visual and olfactory (AVO) inspections and optical gas imaging (OGI) on equipment that has the potential to emit fugitive emissions. The AVO inspections are scheduled monthly. OGI is conducted semiannually by trained operational personnel at our production operations in North Dakota and quarterly at our gas plant and compressor stations in the state. Based on U.S. EPA standard leak rates, our repairs to fugitive emissions components in 2019 in North Dakota reduced carbon dioxide emissions by an amount equivalent to approximately 469 cars from the road.

AVO inspections involve observations (such as fluids dripping, spraying, misting or clouding from or around components), sound (such as hissing) and smell (because Hess equipment is typically in mixed hydrocarbon service and so volatile organic compounds are typically present when leaks are identified). During such inspections, reliability operators monitor equipment for leaks as part of their daily work and document the results. We require reliability operators to be trained and experienced in the appropriate operation of each piece of equipment involved in their work activities and familiar with Hess operations in the areas where they work. They are also required to complete training on the Hess Standard Work documents for each piece of equipment subject to AVO inspection.

OGI is performed by field assurance personnel in our regulatory group who are certified in the use of infrared thermal cameras and other monitoring techniques (such as U.S. EPA Method 21) to detect fugitive emissions.

If a leak is found during inspection, we have a “first attempt” deadline of five days for repair. If a repair within five days is not possible, the leak is documented and a fix is required within 30 days, as per a prior Consent Decree with the North Dakota Department of Health.

We have also committed to replace all remaining high-bleed pneumatic controllers across our North Dakota operations by 2022 (see page 51 of our 2019 Sustainability Report for more detail).

These measures, together with the steps we are taking to reduce flaring, will help to further reduce our fugitive emissions in North Dakota.

ONE Future Coalition

Hess is actively pursuing voluntary methane emission reductions as part of our EHS & SR strategy. As one aspect of this effort, Hess became a founding member of the ONE Future Coalition, a group of companies from across the natural gas industry focused on identifying policy and technical solutions that yield continuous improvement in the management of methane emissions associated with the production, processing, transportation and distribution of natural gas. ONE Future offers a performance-based, flexible approach that is expected to yield significant reductions in methane emissions. The goal is to voluntarily lower methane emissions to less than 1% of gross methane production across the U.S. value chain by 2025. Peer-reviewed analyses indicate that a leak/loss rate of 1% or less across the U.S. natural gas value chain provides immediate GHG reduction benefits.

To achieve this goal, ONE Future has established 2025 methane emission rate targets for each sector of the natural gas value chain: production (0.28%), gathering and boosting (0.08%), processing (0.11%), transmission and storage (0.30%) and distribution (0.22%), which cumulatively total to the 1% target. In 2018 the ONE Future members’ cumulative methane emissions intensity was 0.33% across the U.S. onshore natural gas value chain, down from 0.55% in 2017. ONE Future has also set interim 2020 sectoral targets.

Hess has activities in three of the ONE Future sectors: production, gathering and boosting, and processing. In 2019 we reduced our methane emissions rate across all sectors. For production our methane emissions rate was 0.35%, for gathering and boosting it was 0.14% and for processing it was 0.03%. Our total onshore U.S. methane intensity was 0.52%, which is below the ONE Future combined 2020 interim target of 0.64% for those three sectors, but slightly above the 2025 target of 0.47%. Our relative methane intensity decreased in 2019. This drop is correlated with the continued implementation of our leak detection and repair (LDAR) program across all of our production facilities (existing and new) in North Dakota and our program to phase out high bleed pneumatic controllers. We anticipate that we will achieve the ONE Future targets by 2025.

From its inception, ONE Future has worked with the U.S. EPA to help ensure that any methane reduction achieved through its performance-based approach is recognized and accounted for in the agency’s Natural Gas Star Methane Challenge Program. In October 2016 both parties reached agreement on the ONE Future Emissions Intensity Commitment Option under the Methane Challenge Program. This allowed companies interested in joining the Methane Challenge Program to have the opportunity to choose from two options to reduce methane emissions: the Best Management Practice Commitment or the ONE Future Commitment, which gives credit for performance-based, voluntary reduction efforts.

Hess’ original intent was to report reductions achieved through our LDAR program under the Methane Challenge Program. However, Hess, as well as a number of other Bakken operators, entered into a Consent Decree with the North Dakota Department of Health in 2017 resolving alleged noncompliance with state air pollution laws and provisions of the federal Clean Air Act related to fugitive emissions. Pursuant to the Consent Decree, we were required to implement corrective actions, including implementation of an LDAR program at our existing upstream oil and natural gas production facilities in North Dakota. Given the Consent Decree, Hess did not commit individually to the Methane Challenge Program, although ONE Future is recognized as a Methane Challenge participant. Instead Hess has focused our resources on implementing our LDAR program in North Dakota.

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